FTSE Drifts Lower After Post-Bank Holiday Return, Cable At Fresh 2020 High

FTSE Drifts Lower After Post-Bank Holiday Return, Cable At Fresh 2020 High

Spreadex  | Sep 01, 2020 09:19

The FTSE returned from a long Bank Holiday weekend a bit too chilled out, going in reverse as it fell further from 6000.

Given that the market is digesting the strongest Chinese Caixin manufacturing PMI since 2011, the UK index should be higher.

And there was evidence of that over in the Eurozone, where the DAX jumped 1% and the CAC climbed half a percent, striking 13070 and 4970 respectively.

Yet despite the support of its miners – which saw gains of 0.6% to 2.5% as gold and copper rose – the FTSE dropped 0.4%, sitting at its lowest price for a month.

The index hasn’t been helped by the pound’s continued rise against the dollar, the greenback suffering in the aftermath of last week’s dovish Jackson Hole address from Federal Reserve head honcho Jerome Powell.

Though it only added another 0.2% on Tuesday, that increase pushed cable to $1.341 for the first time since it spiked towards $1.35 in the middle of last December. It’s an incredible turnaround from the sub-$1.15 lows struck in mid-March, made all the more remarkable considering it comes against a backdrop of Brexit angst, with Michel Barnier and David Frost holding emergency talks this Tuesday to try and find a way forwards. And they might struggle to – Barnier reportedly ‘won’t even discuss’ fishing rights, one of the key sticking points between the UK and EU.

Looking further ahead, and the Dow Jones is set to climb 125 points this afternoon. That would return it once again to 28550, having tumbled from 6-month-plus highs of 28800 on Monday.

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